Warren Buffett's "Woodstock For Capitalists"

By: Alex Hassel, The Associated Press Email
By: Alex Hassel, The Associated Press Email

Before facing questions from a crowd of more than 30,000, billionaire Warren Buffett started his Saturday being mobbed by fans. Berkshire Hathaway shareholders treated the 82-year-old investor like a rock star at the annual meeting at CenturyLink Center Omaha.

Admirers held cell phones and iPads in the air as they surrounded Buffett in an exhibit hall. A pack of security guards created a buffer around Buffett as he visited displays selling Berkshire's See's Candy and explaining BNSF railroad's virtues.

At the See's booth, Buffett got a lesson in making hand-dipped bonbons. See's manufacturing manager Steve Powell got Buffett to autograph his white uniform coat.

Later, Buffett took to the stage alongside Berkshire's Vice Chairman Charlie Munger to answer questions from shareholders, journalists and financial analysts for six hours.

“It was awesome,” said shareholder Cindi Warmuth. “I had a great time. It's a lot of fun and I definitely would recommend everyone to come here and visit."

Buffett told shareholders they should expect decent returns on the newspapers the company has bought in recent years, but doesn't expect the newspapers to generate enough profits to make much difference to Berkshire. Buffett said Berkshire paid cheap enough prices for the newspapers it has purchased and expects them to deliver 10 percent returns every year, but he also expects newspaper earnings to continue declining.

Munger pointed out that Buffett made an exception to his usual investing habits for newspapers because he likes them. Berkshire has acquired 28 daily newspapers over the past two years.

Shareholders again rejected a proposal to require the company's utilities to set goals for reducing greenhouse gas emissions. Berkshire owns several utilities through its MidAmerican Energy Holdings subsidiary. Backers of the measure urged Berkshire officials to take a leading role in reducing utility dependence on coal.

Buffett and the board oppose the idea of setting goals for reducing greenhouse gas emissions because it remains unclear how those emissions will be regulated. Buffett and the board controls 39 percent of the voting power. The proposal gained only 57,569 votes. Berkshire said 598,162 votes were cast against the measure. Shareholders rejected a similar measure in 2011.

Buffett said he spends plenty of time thinking about the future of his company after he is gone, but said he's confident the conglomerate will continue to thrive. Buffett said leaders of Berkshire's roughly 80 subsidiaries and all the operating companies would reject a leader that tried to change the way the Omaha-based company works.

Buffett leads Berkshire with a staff of roughly two dozen at its headquarters and he largely lets the CEOs of all Berkshire's subsidiaries make all the operating decisions. Buffett added that Berkshire's board knows who it would pick as CEO if he died tonight, but the top candidates could change over time. Buffett has no plans to retire.

“I think it's a great opportunity for people to understand what Berkshire is composed of and all of these companies, it kind of gives them opportunities to get their face out there,” said shareholder Danielle Hermann.

They didn't just come to see the products but Buffet himself. “It was wonderful,” said shareholder Sam Weiner. “I've always wanted to hear him in person."

His advice in this economy, shareholders said, is the same as always. “Invest in what you know, invest in good, quality businesses,” said shareholder Jared Weiner. “You might have to pay a little more for them, but you'll be better off in the long run."

Buffett earlier poked fun at himself in the humorous movie that began the meeting. A cartoon version of Dancing With the Stars opened the hour-long movie. Buffett and Munger served as judges on the dance show as representatives of different Berkshire companies competed. In the end, Buffett and Munger won the competition themselves with their version of "Gangnam Style" dancing.

In a live-action video later, Buffett tried to pull strings to win a part in Arnold Schwarzenegger's new Terminator movie. But ultimately Schwarzenegger, who once relied on Buffett's financial advice as California's governor, decided that Munger would make a much scarier villain. So Buffett lost the part and had to continue with his day job as Berkshire's chairman and CEO.

The shareholders meeting has grown tremendously since the first one in 1982 attracted 15 people to the cafeteria of one of Berkshire's insurance companies.

Shareholder Larry Cundiff has seen a lot of change at the meetings since he started attending about 15 years ago. Buffett likes to call the carnival-like meetings "Woodstock for Capitalists." The 73-year-old Cundiff said he met Buffett at the 1997 meeting because they wound up sitting down next to each other in the midst of the exhibits of company products.

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